Micron surprised market analysts by beating their fiscal second-quarter earnings expectations despite the impact of COVID-19. The firm revealed it made $4.8 billion in sales and $405 million, or $.36 per share, in income on Wednesday. Investor’s Business Daily notes industry watchers pegged the memory chip maker’s FQ2 2020 results at $4.68 billion in revenue against earnings per share of $.37.
The Boise, Idaho-based corporation also offered guidance for the fiscal third-quarter that outpaces Wall Street’s predictions.
Micron’s Success in an ‘Unprecedented Situation’
Chief Executive Sanjay Mehrotra attributed Micron’s success in the prior quarter to its “excellent business execution” in an “unprecedented situation.” Indeed, the coronavirus pandemic has brought substantial disruption to the semiconductor supply chain. Component manufacturers have struggled to produce and transport their products in the face of widespread government-mandated lockdowns.
Nevertheless, the chipmaker succeeded in realizing the fiscal second-quarter outlook it offered last December.
The company’s stronger-than-expected performance in FQ2 2020 occurred in part because of the rapid spread of COVID-19. Because several countries have issued national or regional quarantine orders, a significant portion of the global workforce has transitioned to working from home. Consequently, companies that offer online-based workflow tools have experienced substantial increases in usage, which has bolstered Micron’s sales.
“In the data center market, we benefited from strong demand for our products from key cloud and enterprise customers,” said Mehrotra.
Micron’s Strong FQ3 2020 Guidance
In the fiscal third-quarter, Micron provided a predicted sales range of $4.6 billion to $5.2 billion against adjusted earnings of $.55 per share. Bloomberg reports market analysts believe the firm will generate $4.88 billion in revenue with adjusted earnings per share of $.52.
As of this writing, the COVID-19 pandemic isn’t contained in major markets like the United States and Europe. Accordingly, online service providers will need to keep expanding their capacity to meet the needs of the rapidly growing remote workforce. Since Micron is a leading provider of NAND and DRAM modules, its memory revenue will likely continue to increase in the near-term.
The chipmaker also expects an uptick in sales to e-commerce and gaming data centers to bolster its bottom line further.
In both sectors, the company’s forecasts align with the realities of the post coronavirus pandemic world. Amazon is in the process of hiring 100,000 new logistics employees to meet a massive spike in customer orders. Also, Microsoft and Nintendo have experienced service outages due to a marked increase in connected gameplay.
As the world’s online infrastructure adjust to massive new levels of throughput, component makers like Micron will continue to stun market analysts.